Zions Bancorporation (ZION) 10/21/09 PriceWatch Alert Bullish Price Movement

Posted: Wednesday, October 21, 2009 8:30 AM EDT
By: Market Intelligence Center Staff

Zions Bancorporation (NasdaqNM: ZION) closed yesterday at $17.23. So far the stock has hit a 52-week low of $5.90 and 52-week high of $45.00. Zions Bancorporation stock has been showing support around 16.10 and resistance in the 18.46 range. Technical indicators for the stock are Bullish and S&P gives ZION a neutral 3 STAR (out of 5) hold rating. ZION appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 15 covered call (ZNQ DC) for a net debit in the $13.53 area. That is also the break even stock price for this trade. This covered call has a 178 day duration, provides 21.47% downside protection and a 10.86% assigned return rate for a 22.28% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the ZION Jan '11 5 Call (OIO AA) and selling the Apr '10 15 call (ZNQ DC) for a $9.05 debit. The trade has a 178 day life and would provide 18.46% downside protection and a 10.50% assigned return rate for a 22.00% annualized return rate (for comparison purposes only). Zions Bancorporation has a current annual dividend yield of 0.22%. [WBA-Seven Summits Research]